Which of the following is NOT a component of the cash flows with leverage equation?

The cash flows with leverage equation primarily incorporates elements that directly impact the cash flows attributable to both operating activities and the effects of financing, particularly debt. The calculation typically involves unlevered cash flows from operations, the corporate tax rate, and the interest tax shield, as these elements relate to financing decisions and their implications on cash flow after considering taxes.

Depreciation expense, while it does influence net income and cash flows, is considered a non-cash expense. It represents the allocation of the cost of tangible assets over time but does not itself affect the cash flow with leverage calculation in a direct manner. The primary purpose of including components such as unlevered cash flows and the interest tax shield is to assess the impact of leverage on overall cash flow, while depreciation expense falls outside the scope of this specific equation. It is important to distinguish between the cash flows generated from operations and those related to financing decisions when analyzing leverage impacts.